Swimmers enjoying the YMCA pool in Grants Pass, Oregon, will notice less humidity in the air thanks in part to almost $78,000 the organization received yesterday in energy efficiency incentives from Avista toward the complete cost of the project.

The energy savings from the new high efficiency dehumidification and ventilation system for the pool area is expected to save the YMCA almost $23,000 per year in energy costs because of using less natural gas than the old system. It does that by pulling warm moist air from the pool area making the air drier and returning the heat to the boiler system to warm the pool water.

The result - the YMCA is expected to use almost 26,000 therms a year less with the new system. That’s enough natural gas to provide service to 43 Oregon homes for a year.

Find out how you too can save energy and dollars whether you are a residential or business customer.

Today we announced a settlement agreement with several parties on the electric and natural gas general rate requests we filed back in April. The settlement, if approved by the Washington Utilities and Transportation Commission (WUTC), would mean a modest two-phase rate increase in electric and natural gas rates. The first would take effect Jan. 1, 2013 and the second on Jan. 1 of 2014.

Better yet, we’ve agreed not to request additional general rate increases that would take effect before Jan. 1 of 2015. This doesn’t mean we wouldn’t adjust rates based on wholesale natural gas costs before then (remember, that’s a separate part of your bill). For more information about how we adjust those costs, read our Natural Gas Pricing 101 series.

But what it does mean is that you’ll have more certainty in your energy rates for the next two years, so you can better plan to manage your energy costs. And your energy prices will still be among the lowest in the nation.

The bottom line

If the commission approves the settlement and you are an Avista electric customer, you would see two separate rate increases:

·Beginning Jan. 1, 2013, if you use an average of 989 kilowatt hours a month, you would see an increase of $1.20 per month, which equates to about 4 cents a day, for a revised bill of $78.69.

·Beginning Jan. 1, 2014, if you use an average of 989 kilowatt hours a month, you would see an additional increase of $1.60 per month, or about 5 cents a day, for a revised bill of $80.29.

Here’s how the changes, if approved, would affect you as a natural gas customer:

·Beginning Jan. 1, 2013, the first 70 therms of your bill would actually cost a little less. This means an average monthly bill for 68 therms would decrease by about 38 cents to $60.37. For every therm you use over 70, you would see an increase of about 10 cents per month. So, if your usage is less than 70 therms a month, through energy efficiency efforts, for example, you will really see the benefit of this change.

·Beginning Jan. 1, 2014, if you use an average of 68 therms a month, you would see an increase of 57 cents a month, or about 2 cents a day, for a revised monthly bill of $60.94.

The settlement and what’s next

You may be wondering what a rate case settlement agreement is and how it all works. When Avista files a request to increase rates, it goes through a process much like a legal proceeding. Parties representing various groups including residential, small-business, low-income, and natural gas industrial customers, take part and submit testimony and proposals on behalf of their groups.

The commission oversees this process, and is charged with setting rates that are fair, just, and reasonable for customers, while allowing Avista the opportunity to earn a fair return on the investment shareholders make so we can continue delivering safe, reliable energy. When we can reach an agreement like this one, it saves time and the cost of a fully litigated rate case. It is ultimately up to the commission to approve the request.

In addition to Avista, the parties to the proposed settlement are the Staff of the WUTC, Northwest Industrial Gas Users, Industrial Customers of Northwest Utilities and The Energy Project, a low-income customer advocacy group. The Public Counsel Section of the Washington Office of the Attorney General and the Northwest Energy Coalition did not join in the Settlement Agreement. The WUTC sets the schedule for next steps, which include hearing testimony from the parties. For more information, see the WUTC website.

Here are a couple of other resources about how energy rates are set that you might find helpful.

This power pole in Hayden, Idaho, has deterioratedto the point where it needs to be replaced. We have over 240,000 distribution poles in our electric system.Based on a 40-year depreciable life, we would need to replace approximately 6,000 poles every year.

If our requests are approved and you’re an electric residential customer in Idaho using an average of 930 kilowatt hours per month, you would see an increase of $4.20 per month, or about 14 cents a day, for a revised bill of $82.89. If you’re a natural gas customer using an average of 60 therms per month, you would see an increase of $4.12, or about 14 cents a day, for a revised monthly bill of $56.67. The Idaho Public Utilities Commission has up to seven months to approve our requests, and the increases wouldn’t take effect until sometime next year.

You may be thinking we just heard about a rate decrease, so why an increase? The costs of delivering energy to you safely and reliably continue to rise. We work hard to manage our costs, while making sure you have the reliable energy that you expect, at some of the lowest prices in the Northwest. The good news is we’ve been able to pass savings from lower natural gas prices and power costs through to you with multiple rate decreases, and we hope this will help soften the impact of the rising costs of delivery to your energy bill.

Rates have decreased throughout 2012Effective Oct. 1, if you are an Idaho customer, you saw decreases in both natural gas and electric rates because of lower natural gas prices and lower power supply costs, after the Idaho Public Utilities Commission approved our rate decrease requests filed in July. Your rates have decreased your natural gas rates twice this year, dropping them by approximately 12 percent overall. In fact, even if today’s rate increase request is approved, your natural gas rates will still be lower than they were at this time last year – and around what they were 10 years ago. Electric rates have remained fairly flat as well when you adjust for inflation.

We’re maintaining and upgrading our system for youMaintaining and upgrading our energy-delivery system is ongoing, and costs more with each passing year. It’s a little like taking care of your home or car. You always have maintenance and operation costs, and sometimes you have to upgrade or update old equipment with new. And that’s expensive. For instance, if you remodel your kitchen, new appliances cost much more than the old ones did when they were purchased.

To serve all of our customers in Idaho, Washington and Oregon, Avista has an extensive system that we have to take care of. To do this, we expect to invest approximately $250 million each year for the next three to five years to continue updating and maintaining our system to serve our customers’ energy needs.

Help is available if you’re struggling with billsWe realize in these difficult economic times it can be a struggle for people to meet their basic needs. We offer services for customers such as comfort level billing, payment arrangements and CARES (Customer Assistance Referral and Evaluation Services) representatives. Our CARES reps are specially-trained employees who provide referrals to area agencies and churches for customers with special needs for help with housing, utilities, medical assistance, and other needs. To learn more, visit www.avistautilities.com.

If you’re an Avista customer in Idaho, we’ve got good news for you just in time for the cooler months of fall and winter. Beginning today and through the winter months, depending on your energy usage, you’ll see lower electric and natural gas rates. That’s because last week the Idaho Public Utilities Commission approved several rate decrease requests we filed in July.

Rates for our natural gas customers in Idaho have decreased twice this year because of lower wholesale prices. Overall, natural gas rates have dropped by almost 12 percent in 2012.

Today’s decreases are mostly because of lower natural gas prices and lower power supply costs. You might remember we reduced natural gas rates for Idaho customers in March by 6 percent. Like then, abundant supplies of natural gas and lower demand have continued to push wholesale natural gas prices downward. That’s good news. Why? Because we pass those savings directly through to you. The cost of purchasing natural gas on the wholesale market is around 40 percent of your bill, so it makes a difference.

The same can be said for electricity. About 60 cents of every dollar you pay for electricity goes towards generating or purchasing the energy itself. So when power supply costs are lower, it means your bill is a little lower. And every little bit adds up.

Starting today, if you use an average of 939 kilowatt-hours per month, you’ll see your electricity bill decrease $1.09 per month to $79.46. If you are a natural gas customer using an average of 60 therms a month, you will see your bill decrease $3.23 to $52.55 per month.

You may have heard about public hearings for Avista’s current Washington general rate request, which will take place this week in Spokane and Spokane Valley. If you are a Washington customer of Avista, you’ve also received a notice in your bill about the hearings.

These hearings, scheduled by the Washington Utilities and Transportation Commission, are part of the normal general rate case process. Customers can comment on the current request either at the hearings, by mail or online, and we encourage our customers to participate in the process.

The first hearing is scheduled on Sept. 27, from 6-7:30 p.m. in the City of Spokane Council Chambers, 808 W. Spokane Falls Blvd., Spokane. A second hearing is scheduled on Sept. 28, from noon to 1:30 p.m. in the City of Spokane Valley Council Chambers, 11707 E. Sprague Ave., Spokane Valley.

If you can’t make a hearing or prefer to submit your comment in writing, you can do so by writing to: WA UTC / P.O. Box 47250, Olympia, WA, 98504-7250, or comment online at www.utc.wa.gov/comment.

Avista filed a request with the Commission on April 2, 2012, seeking to recover costs for investments in upgrading infrastructure to assure the ongoing delivery of reliable energy, along with rising operating and maintenance expenses. Read more about our request in our April Blog post.

If you’ve also heard about requests we’ve made to decrease rates and you want more information, please read our previous blog posts.

Question for the day: Have you ever thought about what makes up your natural gas bill?

Other than looking at how much our monthly bill is and maybe how much energy we used the last month, most of us don’t give it a thought.

As an Avista customer, every dollar you pay for natural gas service on average is made up of three different components – the wholesale cost of the natural gas used (41 cents), the cost for transporting that gas from the producer to Avista’s distribution system (13 cents), and the cost for the people, equipment and services needed to deliver that gas to your home (46 cents).

Last Thursday, we asked the Washington Utilities and Transportation Commission (UTC) to allow Avista to decrease natural gas rates for the second time this year by an additional overall 4.4 percent because wholesale natural gas prices continue to decline. You can read more about the request in the news release.

If our request is approved by the UTC, the new lower rates would be effective Nov. 1, making Washington residential natural gas rates over 11 percent lower than at the beginning of this year. This requested decrease is in the wholesale cost of gas (41 cents) and fixed transportation (13 cents) portions of your bill.

If you’re a Washington customer, you may have seen an insert in your August energy bill that provides information on a different Avista rate request called a general rate case. That request was made last April to increase both electric and natural gas rates. So, why are we asking to decrease and increase natural gas rates at the same time?

The natural gas portion of the general rate case is for the delivery portion (46 cents) of your bill – the people, equipment and services needed to safely and reliably deliver natural gas to you. The request to increase natural gas rates by an overall 5.9 percent is to recover increasing costs to operate and maintain the natural gas system. The UTC has up to 11 months from when the request was made to review and issue a decision.

Rates are complex and can be confusing, so we have a short video that gives more information on the general rate case process. Information on Avista’s general rate case, including upcoming public hearings, is available in the Notice of Request for Rate Increase brochure that was in your August Avista bill. If you missed the insert click this link to check it out.

Good news if you’re a natural gas customer in Washington – your rates could go down for the second time this year thanks to lower wholesale natural gas prices.

We filed a request today asking to reduce natural gas rates in Washington by an overall 4.4 percent. That’s in addition to a 6.4 decrease that was effective March 1 of this year. If the Washington Utilities and Transportation Commission approves our latest request, beginning Nov. 1 residential rates would be over 11 percent lower than at the beginning of this year. You can read more about our request and the drivers in today’s news release.

Want to know more?Check out our special thee-part Avista blog series that helps explain the sometimes confusing nature of natural gas pricing and find out about the three main drivers of your natural gas energy bill – wholesale gas costs, fixed transportation costs, and equipment and people.

When you think about how your electricity is generated you probably think it comes mainly from hydropower. But did you know that Avista also uses natural gas as a fuel to generate electricity? In fact, it makes up 36% of our company owned electric power plants. Natural gas generation is a dependable source of energy because the fuel can be stored to generate electricity anytime, and it has about half the carbon emissions of other fossil fuels, such as coal.

Avista and Portland General Electric co-own a combined cycle natural gas plant called Coyote Springs, located in Boardman, Oregon. The plant has 2 main generation units, and Avista owns Unit 2.

A combined cycle plant has a gas turbine and a steam unit all in one. These types of units are considered very efficient because they use the waste heat from the gas turbine to create steam, instead of exhausting it back into the atmosphere.

Unlike a simple cycle gas plant, which can be fired up quickly to meet the electricity generation needs of customers, the combined cycle plant at Coyote Springs is considered a “base load” facility because the natural gas generator needs to run consistently in order to provide heat for the steam generator. Like a car, there are certain maintenance activities that need to take place after a number of years. This year, unit 2 had its first scheduled major maintenance since the unit went in service in 2002.

The project involves overhauling the natural gas and steam generators in unit 2. From start to finish, the project takes approximately six weeks to complete and a great deal of collaboration and teamwork.

The end result of the maintenance is that Unit 2 at Coyote Springs will continue to have the capacity to generate an average of 280 megawatts of power for our customers – that’s enough electricity for just over 210,000 homes.

We’ve got good news to share about natural gas rates for our 96,000 Oregon customers. Today Avista filed requests with the Public Utility Commission of Oregon for a natural gas rate decrease for Oregon customers in the coming months.

Each year, we propose to adjust rates our customers pay so that customers’ bills reflect our actual costs of purchasing natural gas and generating and purchasing electric power. Today’s requested rate reductions are largely due to lower natural gas wholesale prices, which is good news for our customers.

If you are a customer in Oregon, you have been seeing the benefits of increased natural gas supply and lower prices for some time. If this request is approved, including other rate adjustments proposed by Avista and approved by the commission, you could see your rates decrease to near-2004 levels. If today’s requests are approved by the Commission, you would see two rate decreases: the first beginning Nov. 1, 2012, and the second beginning Jan. 1, 2013.

If the requests are approved and you are a residential customer using an average 47 therms a month, you could expect your bill to decrease by $5.78, or 9.3%, for a revised monthly bill of $56.22 beginning November 1, 2012. You would see an additional decrease of $0.50, beginning Jan. 1, 2013, for a total decrease of $6.28, or an overall decrease of 10.1%, for a revised monthly bill of $55.72. Other customer groups could also expect decreases in a similar range.

Learn more about this Oregon natural gas rate decrease request in news release we just issued.

In our previous articles, Natural Gas Pricing 101, Part 1 and Part 2, we explained that more than half of a customer's monthly natural gas bill is the cost of the natural gas we purchase on the wholesale natural gas market and the transportation costs to get that natural gas to our system. The remaining portion of the bill, about 45 percent – or 45 cents of every dollar a customer pays for natural gas – covers our costs of delivering natural gas to a home or business.

If you’re a Washington natural gas customer, your rates are at levels similar to those from 2003. (clickon image above and below to enlarge)

Did you know our customers are paying less today for natural gas than they were 10 years ago when you adjust for inflation? This is mostly because of the declining prices of natural gas on the wholesale market. As the chart shows, if you’re a Washington natural gas customer, your rates are at levels similar to those from 2003. When adjusted for inflation, natural gas rates in both Idaho and Washington have stayed fairly level over the past 50 years.

How do rising delivery costs impact your natural gas bill?Avista takes the responsibility of maintaining and updating our natural gas delivery system seriously. We have an obligation to serve every customer who requests service and to comply with state and federal requirements. Safety and reliability are paramount to our operations.

Just like upgrading or replacing items in your own home, when we replace or upgrade older equipment, the cost of that equipment is many times more expensive than when it was originally installed. Capital investments like these, which are required to ensure the ongoing delivery of natural gas, along with rising operations and maintenance costs, continue to drive the need for increased rates. For instance, we’re working to replace miles of natural gas pipeline that has reached the end of its service life. The six-month, $3 million project in Davenport, Wash. is just one example of our commitment to maintain and upgrade our natural gas pipeline.

We file requests to recover these costs through our general rate cases, like the one we made to the Washington State Utilities and Transportation Commission in April of 2012. State regulators provide Avista the opportunity to earn a fair return, or profit, on the investment our shareholders have made in the facilities used to provide service to customers. The key word there is “fair,” and here’s how it works: When our costs change, Avista files a request with the state regulatory commission for a rate change. The commission scrutinizes every detail of our costs, reviews volumes of data and takes public testimony. Based on its investigation, the commission sets rates it believes serve the public interest – rates that are reasonable and fair for customers, while allowing Avista the opportunity to be a viable, healthy business and earn a fair return for shareholders, and enabling us to continue delivering safe, reliable energy.

In our last article, we mentioned Purchased Gas Adjustment (PGA) filings. PGA filings are usually separate from general rate requests, and there are times when one of our state commissions may be reviewing a PGA request to decrease rates based on wholesale natural gas costs, while at the same time reviewing a general rate request to increase rates based on rising capital costs. Since we serve electric and natural gas customers in three different states it can be confusing for our customers to keep track of rate filings and rate changes. But as a regulated, investor-owned utility, we have to comply with the regulations set by the utility commissions in the three states where we serve customers, and we can’t increase or decrease rates without receiving approval from the commissions.

Here’s the bottom line: while the wholesale price of natural gas has declined over the past few years, the cost of delivering that natural gas continues to rise, and natural gas rates include both of these costs. Avista works hard to manage costs, improve efficiency and productivity, and be smart about how we purchase natural gas. We take pride in maintaining a system that keeps natural gas safe, reliable and as low-cost as possible.